Huntington to pay Ohio State $25 million in marketing deal

Bank gets direct marketing to campus, alumni

For more on OSU’s new relationship with Huntington National Bank, watch Dispatch higher-education reporter Encarnacion Pyle on WBNS-10TV between 6:30 and 7 this morning, or go to 10TV.com.

THE DEAL

Huntington National Bank will pay $25 million for a 15-year deal to be Ohio State University’s
official consumer bank. Where Ohio State will put the money:

$13.75 million for academics, including more than $10 million in the
endowment

$3.75 million for student life

$3.75 million for athletics

$3.75 million for the alumni association

ECONOMIC DEVELOPMENT

Huntington will lend or invest $100 million in the University District and Near East Side, two
areas where Ohio State is also involved. Read more about the neighborhood investments on
The Dispatch’s
The
City blog.

More Articles

Huntington National Bank will pay Ohio State $25 million to become the university’s official — and
possibly its only — on-campus bank as part of a partnership that will be unveiled today.

Ohio State plans to use most of the money for academic scholarships and educational programs for
students. The deal is the university’s latest attempt to generate money outside the normal channels
of tuition and state support.

“This is an exciting, trailblazing new partnership,” President E. Gordon Gee said.

The $25 million will give Huntington the right to be OSU’s “official consumer bank,” which will
include the exclusive rights to expand on campus and to market directly to more than 600,000
students, alumni and employees. Huntington would still pay rent to lease space for its branch
offices and ATMs.

As part of the deal, Huntington has committed to providing $75 million in loans and $25 million
in private investments to support economic development in two areas that Ohio State has targeted to
help: the University District and the depressed area surrounding University Hospital East. (Read
more about this aspect on
The
City blog.)

Five other banks have a presence on campus, including Fifth Third and US Bank, which have branch
offices. They will be allowed to complete their leases. With renewals, US Bank could remain on
campus until 2032.

The relationship covers only consumer banking; Ohio State is still free to use other banks for
bond underwriting, endowment investments and other services.

Gee has called on officials to examine every university service and asset to determine whether
it advances the school’s mission. That has led to proposals to privatize the parking operation and
possibly making a deal for Don Scott airport.

“We’re looking for ways to make sure we have solid resources as we go forward,” said Geoff
Chatas, the school’s chief financial officer.

Ohio State approached several local banks about the latest opportunity, and two submitted
proposals. The other bank’s offer was “less than 10 percent of what Huntington offered,” Chatas
said. He wouldn’t name that bank.

Huntington plans to build a full-service branch in the new tower at OSU Medical Center when it
opens in 2014, and as many as three additional branches on the Columbus campus. It also could open
branches on regional campuses and add 16 Huntington ATMs to the 10 on the Columbus campus.

“We are going to take care of students by providing convenient, valuable financial services and
benefits,” said David Schamer, Huntington’s director of not-for-profit banking. “This is not about
profiting off their backs.”

The university will provide a mailing list of students, employees and alumni to Huntington to
market its services, Chatas said. No personal information will be shared, and no one will be
required to use Huntington.

Undergraduate student government President Nick Messenger said last night that Huntington’s
services to students are so attractive he thinks many will sign up even if they bank elsewhere.
Huntington’s $125 million commitment to OSU and the nearby community is a bonus, he said.

“I’m not a Huntington customer myself, but I plan to open a checking account tomorrow. I’m that
impressed,” he said.

Huntington will give people information about how to opt out of receiving any further
communication, Schamer said.

Of the $25 million payment, $13.75 million would support academic programs, including more than
$10 million that will go into the endowment.

Also, $3.75 million will go to student life to pay for student transportation to internships and
service-learning projects in Columbus; financial-literacy classes; and new initiatives to enhance
student health.

Athletics and the alumni association each will get $3.75 million as well.